Buffalo Wild Wings, Inc. (Nasdaq:BWLD) announced today financial
results for the second quarter ended June 30, 2013. Highlights for
the second quarter versus the same period a year ago were:
- Total revenue increased 27.8% to $305.0 million
- Company-owned restaurant sales grew 29.4% to
$285.4 million
- Same-store sales increased 3.8% at
company-owned restaurants and 4.1% at franchised
restaurants
- Net earnings increased 41.4% to $16.5 million from $11.7
million, and earnings per diluted share increased 41.9% to $0.88
from $0.62
Sally Smith, President and Chief Executive Officer, commented,
"We're very pleased with our strong results for the second quarter.
Revenue increased 27.8% driven primarily by a 23% increase in the
number of company-owned restaurants versus last year and a 3.8%
increase in same-store sales at company-owned locations. Same-store
sales at franchised locations increased 4.1% for the second
quarter. This quarter's growth is on top of strong second quarter
same-store sales in 2012 of 5.3% at company-owned and 5.5% at
franchised locations. We are pleased that same-store sales at both
company-owned and franchised restaurants continue to outpace the
casual dining category."
Ms. Smith continued, "We managed our controllable expenses and
saw the cost per pound of traditional wings decline compared to
last year, which benefited cost of sales. Strong sales growth and
lower costs and expenses as a percent of revenue produced
impressive net earnings growth of 41.4% and earnings per diluted
share of $0.88."
Total revenue increased 27.8% to $305.0 million in the second
quarter compared to $238.7 million in the second quarter of 2012.
Company-owned restaurant sales for the quarter
increased 29.4% over the same period in 2012, to $285.4 million,
driven by a company-owned
same-store sales increase of 3.8% and 77
additional company-owned restaurants at the end of
second quarter 2013 relative to the same period in 2012. Franchise
royalties and fees increased 7.9% to $19.6 million for the quarter
versus $18.2 million in the second quarter of 2012. This increase
is attributed to a franchise same-store sales
increase of 4.1% and 20 additional franchised restaurants at the
end of the period versus a year ago.
Average weekly sales for company-owned restaurants were $54,759
for the second quarter of 2013 compared to $51,524 for the same
quarter last year, a 6.3% increase. Franchised restaurants averaged
$58,186 for the period versus $54,766 in the second quarter a year
ago, a 6.2% increase.
For the second quarter, net earnings increased 41.4% to $16.5
million versus $11.7 million in the second quarter of 2012.
Earnings per diluted share were $0.88, as compared to second
quarter 2012 earnings per diluted share of $0.62.
2013 Outlook
Ms. Smith remarked, "Our same-store sales in the first four
weeks of the third quarter are 1.5% at company-owned restaurants
and 1.2% at franchised locations, and reflect one less UFC
pay-per-view fight compared to last year. We are comping over last
year's strong same-store sales in the first four weeks of the
quarter of 6.8% and 7.3%, respectively. We are gearing up for
fantasy football draft parties and are excited for the beginning of
the NFL and NCAA football seasons, which include one extra week of
games in our third quarter. This month we rolled out a new menu
strategy of selling wings by portion at all of our restaurants.
Guests now receive a more consistent amount of chicken in their
order rather than a fixed number of wings. We expect this strategy,
along with lower traditional wing costs versus last year, to
improve our cost of sales percentage. We remain confident we will
achieve 17% net earnings growth for 2013, equating to 25% on a
52-week basis."
Ms. Smith concluded, "We will continue to provide a rewarding
experience for our Guests and remain diligent in managing our
business with the right balance of executing today and preparing
for tomorrow. We have exciting changes in motion to continue
building the long-term success of Buffalo Wild Wings across the
globe."
Buffalo Wild Wings will be hosting a conference call today, July
30, 2013 at 4:00 p.m. Central Daylight Time to discuss these
results. There will be a simultaneous webcast conducted at our
website www.buffalowildwings.com.
A replay of the call will be available until August 6, 2013. To
access this replay, please dial 1.858.384.5517 password
4629831.
About the Company
Buffalo Wild Wings, Inc., founded in 1982 and headquartered in
Minneapolis, Minnesota, is a growing owner, operator and franchisor
of Buffalo Wild Wings® restaurants featuring a variety of
boldly-flavored,
made-to-order menu items
including its namesake Buffalo, New York-style
chicken wings. The Buffalo Wild Wings' menu specializes in 20
mouth-watering signature sauces and seasonings
with flavor sensations ranging from Sweet BBQ™ to Blazin'®. Guests
enjoy a welcoming neighborhood atmosphere that includes an
extensive multi-media system for watching their
favorite sporting events. Buffalo Wild Wings is the recipient of
hundreds of "Best Wings" and "Best Sports Bar" awards from across
the country. There are currently over 930 Buffalo Wild Wings
locations across 49 states in the United States, as well as in
Canada.
Forward-looking Statements
Various remarks we make about future expectations, plans, and
prospects for the company constitute
forward-looking statements for purposes of the
Safe Harbor provisions under the Private Securities Litigation
Reform Act of 1995. These statements relate to our future financial
and store performance measures and growth goals for 2013 and
beyond, including but not limited to those relating to our third
quarter sales trends and projected unit and net earnings growth
rates for 2013 and beyond. All statements other than statements of
historical fact are statements that could be deemed
forward-looking statements and are based upon the
current beliefs and expectations of our management. We have
attempted to identify forward-looking statements
by terminology, including "anticipates," "believes," "can,"
"continue," "could," "estimates," "expects," "intends," "may,"
"plans," "potential," "predicts," "should" or "will" or the
negative of these terms or other comparable terminology. Actual
results may vary materially from those contained in
forward-looking statements based on a number of
factors, including, but not limited to, our ability to achieve and
manage our planned expansion, the ability of our franchisees to
open and manage new restaurants, market acceptance in the new
geographic regions we enter (particularly non-U.S.
locations), success of acquired restaurants and investments in new
or emerging concepts, unforeseen obstacles in developing
nontraditional sites or non-U.S. locations, our
ability to obtain and maintain licenses and permits necessary to
operate our existing and new restaurants, our franchisees'
adherence to our system standards, the cost of commodities such as
traditional chicken wings, the success of our key initiatives and
our advertising and marketing campaigns, our ability to control
restaurant labor and other restaurant operating costs, the
continued service of key management personnel, our ability to
protect our name and logo and other proprietary information,
economic conditions (including changes in consumer preferences or
consumer discretionary spending), the impact of federal, state or
local government regulations relating to our employees, the sale of
food and alcoholic beverages, the effect of competition in the
restaurant industry, and other factors disclosed from time to time
in our filings with the U.S. Securities and Exchange Commission,
including the factors described under "Risk Factors" in Part I,
Item 1A of our Annual Report on Form 10-K for the
fiscal year ended December 30, 2012, as updated in subsequent
reports filed with the SEC. Investors should take such risks into
account when making investment decisions. Shareholders and other
readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of
the date on which they are made. We undertake no obligation to
update any forward-looking statements.
BUFFALO WILD WINGS,
INC. AND SUBSIDIARIES |
|
|
|
|
|
CONSOLIDATED STATEMENTS
OF EARNINGS |
|
|
|
|
|
(Dollar and share
amounts in thousands except per share data) |
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three months
ended |
Six months
ended |
|
June 30, |
June 24, |
June 30, |
June 24, |
|
2013 |
2012 |
2013 |
2012 |
|
|
|
|
|
Revenue: |
|
|
|
|
Restaurant sales |
$285,403 |
220,550 |
569,828 |
452,866 |
Franchise royalties and
fees |
19,604 |
18,173 |
39,543 |
36,979 |
|
|
|
|
|
Total revenue |
305,007 |
238,723 |
609,371 |
489,845 |
|
|
|
|
|
Costs and expenses: |
|
|
|
|
Restaurant operating
costs: |
|
|
|
|
Cost of sales |
86,630 |
69,799 |
179,721 |
141,950 |
Labor |
88,929 |
66,638 |
174,760 |
134,906 |
Operating |
41,212 |
32,349 |
82,317 |
65,146 |
Occupancy |
16,865 |
13,091 |
32,991 |
25,891 |
Depreciation and
amortization |
21,084 |
16,090 |
41,227 |
31,621 |
General and administrative |
23,601 |
20,976 |
44,898 |
40,400 |
Preopening |
2,420 |
1,536 |
6,691 |
4,127 |
Loss on asset disposals and
store closures |
229 |
597 |
800 |
1,334 |
|
|
|
|
|
Total costs and expenses |
280,970 |
221,076 |
563,405 |
445,375 |
|
|
|
|
|
Income from operations |
24,037 |
17,647 |
45,966 |
44,470 |
Investment income (loss) |
(84) |
(115) |
261 |
295 |
|
|
|
|
|
Earnings before income taxes |
23,953 |
17,532 |
46,227 |
44,765 |
Income tax expense |
7,464 |
5,870 |
13,359 |
14,858 |
|
|
|
|
|
Net earnings |
$16,489 |
11,662 |
32,868 |
29,907 |
|
|
|
|
|
Earnings per common share – basic |
$0.88 |
0.63 |
1.75 |
1.61 |
Earnings per common share – diluted |
0.88 |
0.62 |
1.75 |
1.60 |
Weighted average shares outstanding –
basic |
18,768 |
18,575 |
18,758 |
18,565 |
Weighted average shares outstanding –
diluted |
18,827 |
18,660 |
18,815 |
18,650 |
The following table expresses results of operations as a
percentage of total revenue for the periods presented, except for
restaurant operating costs which are expressed as a percentage of
restaurant sales:
|
Three months
ended |
Six months
ended |
|
June 30, |
June 24, |
June 30, |
June 24, |
|
2013 |
2012 |
2013 |
2012 |
|
|
|
|
|
Revenue: |
|
|
|
|
Restaurant sales |
93.6% |
92.4% |
93.5% |
92.5% |
Franchising royalties and
fees |
6.4 |
7.6 |
6.5 |
7.5 |
|
|
|
|
|
Total revenue |
100.0 |
100.0 |
100.0 |
100.0 |
|
|
|
|
|
Costs and expenses: |
|
|
|
|
Restaurant operating
costs: |
|
|
|
|
Cost of sales |
30.4 |
31.6 |
31.5 |
31.3 |
Labor |
31.2 |
30.2 |
30.7 |
29.8 |
Operating |
14.4 |
14.7 |
14.4 |
14.4 |
Occupancy |
5.9 |
5.9 |
5.8 |
5.7 |
Depreciation and
amortization |
6.9 |
6.7 |
6.8 |
6.5 |
General and administrative |
7.7 |
8.8 |
7.4 |
8.2 |
Preopening |
0.8 |
0.6 |
1.1 |
0.8 |
Loss on asset disposals and
store closures |
0.1 |
0.3 |
0.1 |
0.3 |
|
|
|
|
|
Total costs and expenses |
92.1 |
92.6 |
92.5 |
90.9 |
|
|
|
|
|
Income from operations |
7.9 |
7.4 |
7.5 |
9.1 |
Investment income (loss) |
(0.0) |
(0.0) |
0.0 |
0.1 |
|
|
|
|
|
Earnings before income taxes |
7.9 |
7.3 |
7.6 |
9.1 |
Income tax expense |
2.4 |
2.5 |
2.2 |
3.0 |
|
|
|
|
|
Net earnings |
5.4 |
4.9 |
5.4 |
6.1 |
|
BUFFALO WILD WINGS,
INC. AND SUBSIDIARIES |
|
CONSOLIDATED BALANCE
SHEETS |
|
(Dollar amounts in
thousands) |
|
(unaudited) |
|
|
|
|
|
|
|
June 30, |
December 30, |
|
2013 |
2012 |
|
|
|
Assets |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$23,499 |
21,340 |
Marketable securities |
6,645 |
9,579 |
Accounts receivable – net of
allowance of $25 |
18,411 |
20,203 |
Inventory |
8,598 |
7,820 |
Prepaid expenses |
2,213 |
3,869 |
Refundable income taxes |
2,136 |
4,122 |
Deferred income taxes |
9,336 |
5,774 |
Restricted assets |
32,316 |
52,829 |
|
|
|
Total current assets |
103,154 |
125,536 |
|
|
|
Property and equipment, net |
407,867 |
386,570 |
Reacquired franchise rights, net |
35,976 |
37,370 |
Goodwill |
32,533 |
32,365 |
Other assets |
16,140 |
9,246 |
|
|
|
Total assets |
$595,670 |
591,087 |
|
|
|
Liabilities and Stockholders'
Equity |
|
|
Current liabilities: |
|
|
Unearned franchise fees |
$2,173 |
1,763 |
Accounts payable |
23,011 |
36,418 |
Accrued compensation and
benefits |
36,368 |
39,637 |
Accrued expenses |
10,008 |
11,461 |
System-wide payables |
32,296 |
51,564 |
|
|
|
Total current liabilities |
103,856 |
140,843 |
|
|
|
Long-term liabilities: |
|
|
Other liabilities |
1,939 |
1,752 |
Deferred income taxes |
38,843 |
37,128 |
Deferred lease credits |
30,247 |
27,992 |
|
|
|
Total liabilities |
174,885 |
207,715 |
|
|
|
Commitments and contingencies |
|
|
Stockholders' equity: |
|
|
Undesignated stock, 1,000,000
shares authorized; none issued |
— |
— |
Common stock, no par value.
Authorized 44,000,000 shares; issued and outstanding 18,777,706 and
18,623,370, respectively |
126,367 |
121,450 |
Retained earnings |
294,915 |
262,047 |
Accumulated other comprehensive
loss |
(497) |
(125) |
|
|
|
Total stockholders' equity |
420,785 |
383,372 |
|
|
|
Total liabilities and
stockholders' equity |
$595,670 |
591,087 |
|
BUFFALO WILD WINGS,
INC. AND SUBSIDIARIES |
|
CONSOLIDATED STATEMENTS
OF CASH FLOWS |
|
(Dollar amounts in
thousands) |
|
(unaudited) |
|
|
|
|
|
|
|
Six months
ended |
|
June 30, |
June 24, |
|
2013 |
2012 |
|
|
|
Cash flows from operating activities: |
|
|
Net earnings |
$32,868 |
29,907 |
Adjustments to reconcile net
earnings to cash provided by operations: |
|
|
Depreciation |
38,704 |
30,267 |
Amortization |
2,524 |
1,354 |
Loss on asset disposals and
store closures |
800 |
1,143 |
Deferred lease credits |
2,105 |
1,618 |
Deferred income taxes |
(1,542) |
(2,245) |
Stock-based compensation |
4,014 |
3,919 |
Excess tax benefit from stock
issuance |
(147) |
(289) |
Change in operating assets and
liabilities, net of effect of acquisitions: |
|
|
Trading securities |
(348) |
(534) |
Accounts receivable |
3,478 |
(4,484) |
Inventory |
(678) |
281 |
Prepaid expenses |
1,653 |
1,090 |
Other assets |
(852) |
(1,084) |
Unearned franchise fees |
410 |
(45) |
Accounts payable |
(8,135) |
(177) |
Income taxes |
2,133 |
6,250 |
Accrued expenses |
(221) |
(234) |
|
|
|
Net cash provided by operating
activities |
76,766 |
66,737 |
|
|
|
Cash flows for investing activities: |
|
|
Acquisition of property and
equipment |
(63,910) |
(44,438) |
Acquisition of
businesses/investments in affiliates |
(10,288) |
— |
Purchase of marketable
securities |
— |
(52,493) |
Proceeds from marketable
securities |
3,282 |
39,998 |
|
|
|
Net cash used in investing
activities |
(70,916) |
(56,933) |
|
|
|
Cash flows for financing activities: |
|
|
Proceeds from line of
credit |
5,000 |
— |
Repayments of line of
credit |
(5,000) |
— |
Issuance of common stock |
1,152 |
1,117 |
Excess tax benefit from stock
issuance |
147 |
289 |
Tax payments for restricted
stock units |
(4,813) |
(8,447) |
|
|
|
Net cash used in financing
activities |
(3,514) |
(7,041) |
|
|
|
Effect of exchange rate changes on cash and
cash equivalents |
(177) |
(46) |
|
|
|
|
|
|
Net increase in cash and cash
equivalents |
2,159 |
2,717 |
|
|
|
Cash and cash equivalents at beginning of
period |
21,340 |
20,530 |
|
|
|
Cash and cash equivalents at end of
period |
$23,499 |
23,247 |
|
BUFFALO WILD WINGS, INC.
AND SUBSIDIARIES |
Supplemental
Information |
|
|
|
|
|
|
Restaurant
Count |
|
Company-owned
Restaurants: |
|
|
Q1 |
Q2 |
Q3 |
Q4 |
|
2013 |
397 |
407 |
|
|
|
2012 |
327 |
330 |
343 |
381 |
|
2011 |
263 |
277 |
288 |
319 |
|
2010 |
235 |
234 |
244 |
259 |
|
2009 |
206 |
215 |
220 |
232 |
|
|
|
|
|
|
|
Franchised
Restaurants: |
|
|
|
|
Q1 |
Q2 |
Q3 |
Q4 |
|
2013 |
514 |
525 |
|
|
|
2012 |
505 |
505 |
511 |
510 |
|
2011 |
488 |
492 |
498 |
498 |
|
2010 |
430 |
447 |
457 |
473 |
|
2009 |
373 |
383 |
400 |
420 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-Store
Sales |
|
Company-owned
Restaurants: |
|
|
Q1 |
Q2 |
Q3 |
Q4 |
Year |
2013 |
1.4% |
3.8% |
|
|
|
2012 |
9.2% |
5.3% |
6.2% |
5.8% |
6.6% |
2011 |
3.9% |
5.9% |
5.7% |
8.9% |
6.1% |
2010 |
0.1% |
(0.1%) |
2.6% |
(0.3%) |
0.6% |
2009 |
6.4% |
2.8% |
0.8% |
2.6% |
3.1% |
|
|
|
|
|
|
Franchised
Restaurants: |
|
|
Q1 |
Q2 |
Q3 |
Q4 |
Year |
2013 |
2.2% |
4.1% |
|
|
|
2012 |
7.3% |
5.5% |
5.8% |
7.4% |
6.5% |
2011 |
1.6% |
2.7% |
4.2% |
5.9% |
3.6% |
2010 |
0.7% |
(0.7%) |
0.3% |
(1.1%) |
(0.2%) |
2009 |
6.0% |
3.7% |
1.9% |
2.0% |
3.4% |
|
BUFFALO WILD WINGS, INC.
AND SUBSIDIARIES |
Supplemental
Information |
|
|
|
|
|
|
Average Weekly Sales
Volumes |
|
|
|
|
|
|
Company-owned
Restaurants: |
|
|
Q1 |
Q2 |
Q3 |
Q4 |
Year |
2013 |
$56,953 |
54,759 |
|
|
|
2012 |
55,131 |
51,524 |
52,561 |
55,595 |
53,783 |
2011 |
48,845 |
47,970 |
49,461 |
51,983 |
49,627 |
2010 |
45,327 |
43,021 |
44,394 |
45,595 |
44,601 |
2009 |
45,593 |
42,938 |
42,602 |
44,583 |
43,912 |
|
|
|
|
|
|
Franchised
Restaurants: |
|
|
Q1 |
Q2 |
Q3 |
Q4 |
Year |
2013 |
$60,050 |
58,186 |
|
|
|
2012 |
57,282 |
54,766 |
55,608 |
58,490 |
56,570 |
2011 |
52,744 |
50,995 |
51,350 |
53,385 |
52,081 |
2010 |
51,532 |
49,051 |
49,005 |
49,837 |
49,835 |
2009 |
50,729 |
48,619 |
48,458 |
50,115 |
49,479 |
CONTACT: Investor Relations Contact:
Heather Pribyl
952.253.0731
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